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This is not entitlement reform

December 5, 2012 at 8:36 am

Austin Frakt

When “entitlement reform” comes up these days, just about the only thing I hear mentioned is raising the age of Medicare eligibility. I could offer up another link rant on this, but it’d be a waste of time. Aaron’s done it. Or see the FAQ.

Look, this is not “entitlement reform” any more than political football is an “adult conversation.” To me, “entitlement reform” implies something substantial, something that addresses the problems of an entitlement so thoroughly that it removes the issue from the debate for many years. “Entitlement reform” actually addresses something that needs fixing in a way that actually contributes toward fixing it.

Raising the Medicare age by two years, gradually over time, will not do that. As we’ve discussed, the savings are too small. As we’ve described, it raises other problems. As is clear, it’s controversial. Nobody serious will claim it fixes Medicare. Of course it does nothing for the broader health system. At best it’s a tweak. Yet some speak of it as if it is the most important thing we can do on entitlements today. Really, it is not.

Moreover, it does nothing, absolutely nothing, to increase the efficiency of Medicare or the health system. Contrary to conventional wisdom and all the political hyperventilating, the real problems of the health system are not its cost to the federal government, but the degree of inefficiency of our spending on it, public and private. Shifting spending from one sector (public) to another (private) and piling additional spending on top of that — which is what raising the Medicare age would do — is orthogonal to efficiency enhancement. It has nothing whatsoever to do with it.

Thus, it is not only small potatoes, it is huge distraction. It is not entitlement reform. In time, this will be proven. Mark my words, in no more than one year after a law is passed to raise the Medicare age, Medicare will be back in the spotlight. The words “entitlement reform” will be uttered again, and very soon. Will anyone mean it?

This is a distraction and a compromise that helps to shut up the uniformed. Medicare is not going to basically change anytime soon, as the voters supporting it are only going to grow in numbers these next few decades.

This means more central money creation and real goods transfers to seniors by ‘we the people’. Or not…

I have participated for a long time in an internet discussion group with people who have very different political views. All bright, very well educated and successful. When we talk about the effects of raising Medicare age those on the right are pretty much immune to numbers and data driven evidence on the topic. They just know that we are living longer, so if we raise the age of eligibility, we will go back to people having the same amount of time receiving benefits. It has to fix it they think. Very frustrating.

Very well put.. To Steve, I’d just note that those on the left can be just as immune to data and numbers, not to mention the real world. Just look at anyone who believes you can cut “waste and abuse” out of Medicare in sufficient amounts to put the system on the path to financial solvency, or that cutting reimbursements to providers won’t have any impact on recipients access to care.

Unquestionably, under the current system, one of the big problems is that many older adults can end up uninsured for years before they get Medicare and therefore end up entering the Medicare system sicker (and more expensive).

Any numbers on how having more people covered by insurance <65 might change this? If some are determined to raise the eligibility age to 67, might that be leverage to then push for less resistance to the full coverage mandated in the ACA?

Not only is raising the eligibility age for Medicare NOT “entitlement reform,” raising the eligibility is a continuation of our 30 years of “voodoo economics” that shift dollars from poor and working and middle class Americans to the richest Americans. It isn’t construction workers and waitresses and cabdrivers and retail clerks who are living to age 90 or 95; it’s U.S. Senators and Wall Street moguls. Worker bees are lucky if they reach age 80. So all that raising the eligibility age does is take benefits away from the worker bees and hand them to the 1%. Hardly sounds like good public policy to me….

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